A Charge card is a type of payment card that requires the cardholder to pay the full balance owed each month by the statement due date. Unlike credit cards, charge cards do not allow for revolving credit, i.e. cardholders can not carry over a balance from one month to the next. If the cardholder fails to pay the full balance by the due date, they may be subject to significant penalties, including suspension on card usage, or cancellation of the card / closure of account. Since the balance must be paid in full each month, there are no interest charges with charge cards. Charge cards may not have a pre-set credit limit. However, the spending limit may vary based on cardholder spending habits, payment history, credit record, and other financial factors.

Like credit cards, the use of a charge card can influence cardholder's credit history. Timely payments can positively affect their credit scores, while late payments or non-payments can have a negative impact.

Charge cards can be issued to consumer or business.

Program Setup prior issuing Charge card

Your organization has to be given specific privileges to be able to issue charge cards. Please reach out to your contact at Synctera for more information.

Creating a Charge card Product

To issue a Charge card product, the following steps have to be completed:

1. Create a person - as a precursor, the person set-up has to be completed (Person API spec), including passing the KYC/KYB process via KYC Verification API Overview
2. Disclosures - these must be accepted by the personal or business customers (including credit agreement). See the disclosures section for details.
3. Charge card Application - a CHARGE_UNSECURED account cannot be created until the customer applies for an unsecured charge card via the Application API. Overview here
4. Account Template - Setting up an Account Template specific for CHARGE_UNSECURED. See the unsecured charge account API guide here.
5. Unsecured Charge Account - Creation of the charge account. See the unsecured charge account API guide here.
6. Issue a virtual or physical card for the charge account - see the personal cards guide for further details.
7. Adverse Actions - If a charge card application is denied, adverse action reasons need to be sent to the personal customers (optional for business customers) and the adverse actions ID needs to be included in the charge card application when the application status is marked as CREDIT_DENIED. See the Adverse Actions API spec here.

Disclosures

As the application and the accounts are being created, the fintech has to inform Synctera of the Disclosures acknowledged by the applicant. Specifically for Charge card, the required disclosures include:

At the time the Application is created

1. E-Sign
2. Privacy Notice
3. USA Patriot Act Notice
4. Owner Certification (for business customers)

Prior to the Account being created

1. Account Terms & Conditions
2. ACH Authorization

Please see details for the Disclosures here - Customer Disclosures